New service tax increase is rational, says analyst
PETALING JAYA: On March 1, Malaysia’s service tax rose from 6% to 8%, sparking concerns about price increases during the 2024/2025 school term and Ramadan.
The Madani government, led by Prime Minister Anwar Ibrahim, assured that essential items like food, beverages, and telecommunications services would not be affected.
Universiti Utara Malaysia school of economics, finance and banking senior lecturer Nur Hafizah Ismail said, the rise in prices of some goods can be attributed to the higher service tax on logistics services, the lifeline of supply chains.
“However, the increase in prices of goods and services largely depends on traders and how they choose to pass on the logistics costs to consumers.
“In other words, it is up to the traders to decide the extent of the price increase or how much profit margin they want to achieve. This perception holds true in…
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